Getting started in researching a business

QUESTION: What are some of the basic steps I have to take in order to begin researching a business?

ANSWER by David McKie

The first question you have ask is whether the business is public or private. If it’s the former, then there are many ways to dig for information. If it’s the latter, then your options are more limited. Let’s assume that the company in question is public, meaning that it trades on stock exchanges in the United States, Canada or both jurisdictions. (There is a good discussion on finding the business angles in stories in the Canadian journalism textbook, Digging Deeper. Please consult the endnotes for more information.)

Such companies must file regular reports with securities regulators such as the U.S. Security Securities and Exchange Commission (SEC) and the Ontario Securities Commission (OSC). For example, technology giant Nortel trades on both stock exchanges and must file reports with both agencies.

The SEC and the OSC are self-funded government agencies charged with protecting investors from “unfair, improper and fraudulent practices.”  They help ensure that the stock market maintains its integrity by making companies with publicly traded stock provide information anyone can read. These documents or forms contain a wealth of information investors need to know before deciding whether to buy a company’s stock.

For instance, companies must reveal how much they’re really making, whether they have been involved in any business dealings that could affect their bottom line, how much money top executives are paid or whether the company is being sued. While this information is essential for investors, it’s also grist for journalists searching for information companies may want to keep quiet.



The SEC ( and the OSC ( — Canada’s largest and arguably most important securities regulator — require companies such as Nortel to file these documents at regular intervals. In chapter nine and appendix C of Digging Deeper, you’ll find a list and explanation of some of the most significant documents, but here are a few:

U.S. Form 10-K / OSC Financial statements, MD&A, annual information

The SEC refers to it as a Form 10-K. The OSC breaks it up into three separate documents called Financial Statements, MD&A and the Annual Information Form. The form is supposed to be filed 75 days after the end of the company’s fiscal year. For journalists hunting for information, this means you should be perusing the SEC website at the end of March. In Canada, the deadline is 90 days after the end of the fiscal year. If the company trades stock in Canada and the U.S. it must file with the SEC first. So, you don’t have to wait before gaining access to key information.

U.S. Form 10-Q / OSC interim financial statement

The Form 10-Q or Interim Financial Statement differs from the 10-K in that it is filed quarterly. And unlike the 10-K, it hasn’t been verified by an outside auditor. The 10-Q is due 45 days after each quarter ends and contains much of the same information you’ll find in the 10-K. Reporters usually compare the financial information in the 10-Q to the similar time period in the 10-Q from the previous year to get a sense of how the company is doing.

Annual information or annual report

In the Annual Information form, or annual report the company doesn’t have to be as brutally honest about its finances. That said, you may uncover some nuggets in the section in which management discusses prickly issues that may be concerning investors. This Management and Discussion and Analysis (MD&A) is contained in the portion of the annual report required by regulators and is usually located near the back.



These documents are rich in detail. To get a sense of the kinds of stories they yield, simply visit a website of your favourite newspaper and use one of these forms as a search term. You should be able to read how the information in these forms is used to tell stories.

Another good tactic is keeping track of what the company says on the record. This can be accomplished quite simply by visiting the company’s website where you will also find many of these forms under headings such as “investor relations.” (Companies don’t usually make it easy to find these forms, so you’ll have to hunt.) Once you get an idea what the companies are saying on the record, contrast that with what they’re telling investors.

For instance, if a company is boasting about the money it’s spending on research and development and uses that spending to portray itself as an innovative company that’s different from its competitors, check out how much money it’s actually spending on R&D compared to, say, marketing. If the money spent on the latter is more than that spent on the former, ask the company why it seems to be favouring promotion over research.

As an exercise to familiarize yourself with this kind of reporting, choose a company, find out when it is expected to file a 10-Q, read the document and attempt to do a story. If you’re uncomfortable with numbers, ask someone such as business professor or an accountant in your media outlet’s finance department to help you decipher the data.

The key questions you may want answered could include:

·                     Is the company making or losing money?

·                     How much cash does it have to spend?

·                     If it’s a high-tech company, how much is it spending on R&D versus marketing?

·                     Is it facing any lawsuits (criminal or civil) that could affect its bottom line?


And finally, apart from asking questions about the company’s financial viability, you might also want to find out how the company is regulated. If it sells prescription drugs, then it’s regulated by Health Canada and the U.S. Food and Drug Administration. If it’s a transportation company, then its planes may be inspected by Transport Canada. It it’s guilty of polluting the environment, then it may have been fined by Environment Canada. And if it’s a company that has violated a particular section of the B.C.’s Occupational Health and Safety Act, then it may have been fined by WorkSafe BC, or in Ontario by the Ontario Ministry of Labour.

So, there are many ways to investigate companies that can take you beyond the spin of their public pronouncements.

David McKie is an award-winning journalist with the CBC’s Investigative Unit and one of the four journalists who wrote the Canadian textbook, Digging Deeper. He also teaches journalism at Carleton University, edits a quarterly magazine for the Canadian Association of Journalists called Media, and maintains a website that tracks requests that are made under the federal Access to Information Act.  If you have any further questions, feel free to contact him at: